IndusInd Bank, one of the country’s fastest-growing mid-sized banks, on Thursday reported a 25.1 percent net profit growth of Rs 495.27 crore in the January to March quarter, aided by higher other income and lower provisions. For the full year, the bank reported a 27 percent jump in net profit at Rs 1,783.72 crore, from Rs 1,408.02 crore.
The profit was largely in line with a CNBC-TV18 poll estimate of Rs 498 crore and met most analyst expectations too.
The bank’s core fee income jumped 29 percent in the fourth quarter to Rs 568.57 crore and about 30 percent for the full year ended March 2015 at Rs 2,086.66 crore. Other income (non-interest income) rose 26 percent year-on-year to Rs 658.48 crore, driven by a 29 percent jump in fee income.
“The bank delivered a net profit growth of 27 percent year-on-year, supported by healthy traction of core fee income at 30 percent,” RomeshSobti, MD & CEO, IndusInd Bank, said in a statement.
Asset quality for the bank improved with gross non-performing assets (NPA) lower at 0.81 percent in the March quarter from 1.12 percent levels a year earlier. Net NPA was at 0.31 percent in the March-ended quarter, compared to 0.33 percent levels a year earlier.
Sobti expressed cautious optimism about the macro-banking picture in India. “The mood has changed from hope to planning for growth, though people are still watchful,” Sobti said. Factors like falling interest rates and the willingness to borrow from banks were positive signals, he added.
Commercial vehicle financing business has been slowly growing for some financing groups and banks in recent months, analysts said.
IndusInd’s CASA (current and savings account) ratio – as a percentage of total deposits – grew by 34.13 percent in the fiscal year 2014-15, compared to 32.55 percent for the previous fiscal. The bank’s total deposits rose by 23 percent for the year, to Rs 74,134 crore on March 31, 2015, from Rs 60,502 crore a year earlier.
IndusInd now has 801 branches across India. “We planned CASA to be at 35 percent for the three-year period between 2014 and 2017. Over time, we want to take CASA higher to 40 percent,” Sobti said. IndusInd plans to open 1,200 branches by 2017.
Analysts broadly welcomed IndusInd’s quarterly earnings performance. "Profit for the bank was in line with expectations," said a banking analyst with a brokerage arm of a private bank. He said going ahead, IndusInd may see acceleration of some of its targets, “considering that the bank has fared well in a tough environment”.
IndusInd was in the news last week when it said it will acquire the Royal Bank of Scotland’s (RBS’s) Rs 4,500 crore diamonds and jewellery financing business and related deposit portfolio in India. RBS has been scaling down operations in several markets, including India. RBS clients have businesses globally, including in the US, Antwerp and Dubai, Sobti had said last week.
Commenting on IndusInd’sfuture strategy for acquisitions, Sobti said they would look at businesses which bring specialisation, differentiation and enhance the bank’s position of dominance.
“It is a well-managed, high quality portfolio in the market,” Sobti said, about the acquired diamond financing business.